Car buyers' Budget 2008

  • Increase in fuel duty postponed
  • VED bands increased for 2009
  • Road tax increased from Thursday
Chancellor Alistair Darling has unveiled his first Budget.

The main headlines for motorists are:

Fuel duty
The proposed 2p-a-litre increase in fuel duty, due to come in on April 1, has been postponed until October.

A further 0.5p-a-litre increase in fuel duty 'in real terms' will come in 2010.

Road tax
New Vehicle Excise Duty (Road Tax) bands will come into force in 2009. This is to make buyers of more polluting cars pay more in tax.

In 2010, a new so-called 'showroom' tax will be enforced. New cars with carbon dioxide emissions of less than 130g/km will not pay road tax in the first year of ownership, while buyers of the most polluting cars will pay a new higher rate in the first year.

Road pricing
New funding will be made available to develop technology for a national road pricing scheme.

Carbon emissions
The government had set a target of a 60% reduction in carbon emissions by 2050, but Darling is considering increasing that target to 80%.

The first ever 'Carbon Budget' will be annoucned alongside next year's Budget.

The European Commission published a report last year to set car manufacturers a mandatory target to reduce average new car CO2 emissions to 13g/km by 2012. The Chancellor announced today that the Government will ask the EU to set a longer-term target to reduce average new car emissions to 100g/km by 2020.

What do you think?
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